Change Course, and Canada’s National Observer launched the first annual Climate Finance Scholarship Contest, an opportunity for young people across Canada to showcase and share visionary, solutions-oriented essays that reimagined the role of Canada's Big Six banks and other powerful financial institutions in our communities. Each of the two contest winners won $2,500 scholarships for written or multimedia submissions. Yesterday, Mimi O’Handley used her winning essay to challenge financial institutions to reinvest in solutions to help combat the climate crisis. Today our second winner, Diana Yoon, proposes an innovative model that financial institutions could consider.

Young people are often told that the low-carbon, equitable future we seek is idealistic and unrealistic. We're also told there is no money to fund climate solutions. Yet, as the climate crisis, affordable housing crisis and global conflict worsen, it feels like the future we are fighting for is more about survival than hope. Is it still possible to shape the climate future we are headed towards?

I believe so. If we critically analyze the current state of green capitalism, we can shift the will of financial institutions and governments toward community power and climate action. We must turn our focus to the glimmers of hope from community-based climate resilience solutions, like the Portland Clean Energy Community Benefits Fund, which "invests in community-led projects to reduce carbon emissions" and "create economic opportunity" to increase climate resilient communities. Financial institutions will not willingly shift their practices to enable community-driven climate resilience solutions unless they increase their bottom lines. A neoliberal approach is unable to produce solutions to the climate crisis that do not continue our trajectory of the accumulation of capital.

There is widespread public agreement on climate change, but the ability of climate actions to be impactful is still uncertain. Climate policies passed and solutions to reduce carbon emissions are chipping away, while the root of the problem — the profits of the fossil economy — feels unreachable. For example, banks like RBC have invested and continue to invest more than US$250 billion in coal, oil, and gas since the Paris Agreement was signed in 2016. How can we trust financial institutions to face responsibility and work together with low-income communities of colour who are on the front lines of climate impacts and face the brunt of cost-of-living increases? Power dynamics and power relations must be challenged if we are going to see financial institutions better serve community interests, rather than the continual flow of capital accumulation. Indeed, we need solutions that are rooted in justice. Who gains and who pays? What forces perpetuate unjust socio-environmental conditions? And what does it take to turn such a critical analysis into a force for social and environmental good?

To make my point, I want to highlight a community solution that challenged existing financial profits and funnelled money instead towards community wealth building: Portland’s Clean Energy Community Benefits Fund. It is justice-driven, accountable and community-powered — all with the vision and focus to invest in climate action with multiple benefits. Won via citizen power through a municipal referendum, this fund is the kind of community asset-building that financial institutions could help enable through innovative finance solutions like community bonds.

The principles that Portland’s fund is based on are exactly what financial institutions could be designed like to truly advance community-based solutions for people and the climate. "Justice-driven" calls for the acknowledgment of past and current racial and systemic discrimination, with an action plan to centre Black, Indigenous and racialized people in this work. "Accountable" demands transparent funding, oversight and engagement processes — largely different from what Canadians have come to expect from fossil fuel companies and their financiers greenwashing their brands while continuing to profit from oil and gas. The fund will "invest in people, livelihoods, places, and processes that build climate resilience and community wealth, foster healthy communities, and support regenerative systems. Avoid and mitigate displacement, especially resulting from gentrification pressures."

It is important to understand that financialization can cause harm even in a low-carbon economy. This commitment from the Portland Clean Energy Community Benefits Fund to avoid and mitigate displacement and gentrification is significant. Aging residential buildings are either getting retrofitted or demolished and rebuilt to higher energy efficiency standards, which can be good for the environment. However, without sufficient tenant protections, this phenomenon leads to displacement or increased rents for existing tenants.

Financial institutions are incentivized to generate profit from housing investments — even if they are meant to reduce emissions. We know that this practice isn’t acceptable, as the lack of affordable housing is furthering inequality in our society. When renters spent nearly nine per cent more than they earned in household disposable income in 2023 and homeowners saved seven per cent of their take-home pay, it continues to feel like the financial system is rigged against people without intergenerational wealth. Even RBC states that this risk of greater inequality between renters and homeowners is highlighted as a reason to address the housing crisis.

This is why it is important that climate solutions, backed by investments in a low-carbon economy, are designed from the outset to protect marginalized communities. Financial institutions are omnipresent in our lives, through what we do for work, what we consume, and what we need to live. A climate-resilient future is possible, but we need to demand it is one that centres community power, not profit.

Banks could implement initiatives like #Portland's Clean Energy Community Benefits Fund with its focus on investing in #climate action with benefits for communities battling the scourge of climate change, writes Diana Yoon @DianaYoonTO #cdnpoli

Diana Yoon is a climate and housing justice advocate in Toronto/tkaronto. Currently working in co-operative housing, Diana previously advanced climate solutions at the Toronto Community Housing, the Toronto Environmental Alliance, and the Atmospheric Fund. In addition, Diana is a board member of the Circle Community LandTrust and a former CUPE 3903 department rep. She holds a masters of arts in geography from York University and a post-graduate certificate in environmental visual communications from Fleming College at the Royal Ontario Museum.

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"it continues to feel like the financial system is rigged against people without intergenerational wealth"

The "continues to feel like" part is misleading. It IS the fact that the financial system is rigged in such a manner, and we do ourselves a disservice by using language that implicitly offers the benefit of the doubt. This misuse of language is also why RBC will say that addressing the housing crisis is important but not actually DO anything about it.

The banking system is geared towards profit maximization, by whatever legal (or questionably legal) means exist, and so this entails demanding laws from policymakers, and as individuals taking our business away from private banking. Regulation and financial reallocation are the only languages the banks understand, so we need to speak them.

Benefits For Cities and Municipalities Of a Public Bank

"Public banks partner with our existing community banks, credit unions, financial institutions and development agencies to provide affordable and sustainable credit for locally-­‐directed economic development and jobs creation. The partnership supports sound municipal finance, lowers public debt, contributes substantial non-­tax revenue to the general funds of our local governments and creates solid economic opportunity."